Norway's Telenor and Videocon differ with GSM group on CDMA airwave pricing

Norway’s Telenor and Videocon Telecom have broken ranks with COAI members and criticised the GSM industry body’s plans to continue a war of letters.Kalyan Parbat | ET Bureau | September 28, 2015, 08:15 IST

COAI today said the government should auction the entire spectrum available with it at a realistic reserve price as early as possible.KOLKATA: Norway’s Telenor and Videocon Telecom have broken ranks with COAI members and criticised the GSMindustry body’s plans to continue a war of letters on issues relating to pricing of CDMA airwaves, a matter that has pitted industry biggies Bharti Airtel, Vodafone India and Idea Cellular against telcos led by the Ambani brothers.

In an internal email dated September 24, seen by ET, Telenor has exhorted COAI "not to rush one submission after another" to the government "on this extremely important policy matter" (read: issues relating to 800 MHz band, called CDMA band) without adequate discussions among all members. It said that such knee-jerk reactions put the GSM industry body "in poor light before the government".

"If such discussions are happening amongst some members, we definitely have no knowledge of it," and "would request you to organise a concall to discuss this important issue," said the Scandinavian parent of local GSM carrier, Telenor India, in its email to COAI director general Rajan Mathews.

Mathews, however, countered any notion of cracks within COAI, saying the body’s initial letter dated September 16 — which sparked the letter war — was backed by all members, bar one, referring to Reliance Jio Infocomm. "The COAI stands by the representation made in its (September 16) letter of submission to DoT (telecom department), and all its members, except one, are in support of the letter. Anything contrary is just noise and an attempt to distract from the contents of the submission," said Mathews in a written response to ET’s queries.

The COAI letter to telecom secretary RK Garg had sought to increase the price of liberalizing CDMA spectrum, which would allow the band to be used for 4G. COAI had also sought a cut in amount of such spectrum that a telco can hold, proposals that were junked by subsequent letters dated September 18 by Anil Ambani-headed Reliance Communications and Jio, headed by Anil’s elder brother Mukesh. Jio, which is the sole major holder of 800 MHz spectrum among COAI members, had distanced itself from the GSM lobby body’s letter, saying it was the view of only a few COAI members.

Telenor’s latest comments, backed by another COAI member Venugopal Dhoot-owned Videocon Telecom via letter dated September 24, came in response to an internal group mail from Mathews dated September 23, seen by ET, which suggested that the GSM body was preparing to counter the RCom and Jio letters.

Telenor has also quizzed Mathews on whether members wish to use the GSM industry body’s platform for larger issues or merely "to dive down to some micro issues which highlight divisions within the industry and may prevent forward movement on important matter".

On the Norwegian mobile carrier’s objections to COAI rushing multiple submissions to the government on issues relating to 800 MHz spectrum, Mathews said "any further clarification should be sought directly from Telenor".

When contacted, a Telenor spokesman said the company does not comment on "matters under discussion among member-operators of an industry association".

Videocon Telecom CEO Arvind Bali, in turn, said: "This is an internal COAI issue. We respect all operators and don’t want any unnecessary publicity to it."

Smaller operators like Telenor and Videocon want COAI to focus on larger issues like M&A policy, which is crucial for them, rather than spectrum issues relating to 800 MHz band which is important for bigger GSM players due to their impending competition over 4G with the likes of the Jio-RCom combine. Telenor needs to grow to stay relevant while Videocon has been looking to exit the mobile services business.

In the September 16 letter, India’s top GSM carriers, who had routed their views through the COAI, had said that in circles where less than 5MHz of 800 MHz was sold in March 2015 auctions -not enough to offer 4G services - the auction winning price couldn't be taken as the marketlinked price benchmark for liberalizing such airwaves. It had also called on the government relook at the 10 MHz spectrum cap rule pertaining to the 800 MHz band.

However, in near identical letters again to Garg, Jio and RCom had said their GSM rivals' proposals were "frivolous, legally unsustainable and anti-consumer", which would also tantamount to bringing about "a retrospective change" in the March 2015 spectrum auction rules.

The stakes are huge for Jio and RCom, given that they are ready to pool their 800 MHz airwaves and ink a countrywide spectrum sharing-cum-trading pact for offering 4G services and take on India’s top 3 GSM carriers in the high-speed broadband space. Any COAI-suggested move to increase the cost of liberalizing 800 MHz airwaves or reducing such spectrum holding limits can undermine Jio-RCom moves to combine potential 4G airwaves.

Separately, RCom initiated contempt proceedings in the apex court against the Department of Telecommunications, blaming it for delaying a spectrum sale that would have enabled dues to be paid to Ericsson and lenders.